Business Unethicality as an Impediment to Consumer Trust: The Moderating Role of Demographic and Cultural Characteristics

Abstract

The article reports the findings of a study conducted among 387 consumers regarding their perceptions of the unethicality of business practices of firms and how these affect their response behavior, in terms of trust, satisfaction, and loyalty. The study confirmed that high levels of perceived corporate unethicality decrease consumer trust. This in turn reduces consumer satisfaction, which ultimately has negative effects on customer loyalty. It was also revealed that, although both consumer gender and urbanity have a moderating effect on the link between perceived unethicality and trust, the age group and level of education of the consumer did not exhibit such an effect. With regard to consumer cultural characteristics, both high uncertainty avoidance and low individualism were found to increase the negative impact of business unethicality on trust, as opposed to power distance and masculinity that did not have any moderating effect on this relationship. Implications for managers are extracted from the study findings, as well as directions for future research.

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Acknowledgments

The authors would like to express their appreciation to the Section Editor and the anonymous reviewers of the Journal for their insightful comments, constructive input, and useful guidance on earlier versions of the manuscript. The authors would also like to thank Crystalleni Paridi and Marina Vasiliou for their assistance in collecting the data for the purposes of this study.

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